function out = simple_tax_formula(eps_w_M, eps_w_C, psi_M, psi_C, var)
%SIMPLE_TAX_FORMULA Computes the optimal tax rate based on the
%simple formula

    I_CR = var.f_C * (1 - psi_C) * (var.avg_inc_R/var.w_C)^(1+1/var.epsilon);
    I_RM = var.f_M * (psi_M - 1) * (var.avg_inc_M/var.w_R)^(1+1/var.epsilon);

    out = (eps_w_C * I_CR - eps_w_M * I_RM)/(var.q_B * var.K_B);

end
